DISQUS

JLM · 1 month ago

Fred, as always a thought provoking topic and position. It is about far more than investing --- it is also about life in general. What is important and how do we REALLY enjoy ourselves?

Last week I went hiking in the Great Smokeys with my wife to see the leaves change color. Breath taking natural beauty amongst the mountains, waterfalls, rivers, trails, old growth forest and views forever. 8-10 miles a day, wonderful sensuous meals and staying at the exquisite little Buckberry Lodge.

Everything was going well, swimmingly, lots of fun --- until I ran into a 600 lb black bear on the trail above a waterfall between me and the way home one afternoon as the shadows lengthened.

The next 5 minutes were painstakingly SLOW. I remember every second like it was an hour. It was the most fully alive I had been in decades. The margin for error was ZERO. The ability to delay action was simultaneously non-existent. Not engaging was not a possibility.

JLM · 1 month ago

So what I think you are really talking about is ENGAGEMENT. Real engagement. Sometimes you just have to be engaged, it is a matter of life and death.

What you are espousing is drilling down deeper to a level where more information exists, creating a real relationship and, in my view, thereby actually reducing financial risk in a meaningful manner. I think more of the fun in life is in the deeper relationship with good people.

As to the bear --- he did not hear me because of the sound of the falls, so I threw a rock at him to catch his attention, stood as tall as I could with my arms above my head holding my hiking stick and yelled aggressively at him. All as recommended by the Park Rangers in such a situation but at the time it seemed like a very, very speculative and weak plan.

I noted with some trepidation, that Plan B was nonexistent. I was going "all in" on Plan A.

Well, it worked. The huge bear looked at me very carefully from 30' away (I could smell the damn thing and the old bear could have stood with a bit of hygiene) and I yelled at it emphatically three times.

The bear cocked its head quizically at the third yell and lumbered down the mountainside about 20' and hid behind a tree. All the time, the bear kept looking at me from behind the tree. I admit to thinking --- hmmm, could this be a "head fake"?

I kept my face toward the bear, kept my high posture and walking stick above my head and slid down the trail with my wife hiding behind me. At the falls, some folks pointed out a cub playing in the water. Momma Bear had been looking for her cub?

All's well that ends well.

My wife still wants to know what was Plan B?

DaveinHackensack · 1 month ago

"My wife still wants to know what was Plan B?"

Which one of you is the faster runner?

David Semeria · 1 month ago

I kept my face toward the bear, kept my high posture and walking stick above my head...

Bears aren't smart. You should have pretended it was rifle :)

JLM · 1 month ago

I actually think one of the problems with bears in the Smokies is that there is no hunting and they have lost a natural fear of man. I think the Park Rangers should shoot them w/ rock salt to build up their fear of man.

David Semeria · 1 month ago

Well, I was only joking - but assuming no long-term harm comes to the bears, there would be a decent 'greater good' case for doing what you suggest.

JLM · 1 month ago

Hmmm, do you consider "bear stew" to be a long-term harm? LOL

David Semeria · 1 month ago

Hunting's not my bag, Woody :)

But I do know bears are hard enough to kill with shot, so I was assuming that a bit of salt would give them the equivalent of nasty little rash.

By the way, I recently got into a big row over who would win a fight between a lion and bear. Since you seem to know a lot about this kind of thing, I'd be very interested in your opinion...

JLM · 1 month ago

BTW, I have hunted black bears in Virginia with Airedales which is quite an experience. You run them up a mountainside in the Shenandoah Valley, they climb a tree, you follow the dogs until you find the tree and then you shoot them out of the tree being careful not to allow them to fall on you.

I think that a bear (certainly the polar, grizzly and brown and likely the black) wins because they are singular hunters with big jaws and unbelievable claws. Bears which can be as big as 8-900 lbs kill by crushing your head and by skinning you alive w/ their claws.

Lions which can be as big as 450 lbs kill primarily by choking their victims to death which seems a tall order with a big bear. Lions are pack hunters and the females of the species do most of the hunting.

I bet on the bears.

David Semeria · 1 month ago

..being careful not to allow them to fall on you

Um, shooting bears out of trees looks like it can get a lost messier than shooting fish in barrel....

Excellent analysis of the lion/bear fight. It would appear I've lost that particular argument.

fredwilson · 1 month ago

Run like hell was plan B

JLM · 1 month ago

Bears are faster than man.

fredwilson · 1 month ago

Wow. I love hiking in the mountains in the fall and fortunately have not had to deal with 600 lb bears. Was your wife with you when that happened

JLM · 1 month ago

Yes and my stock is now trading at an all time high. A woman really appreciates being saved from being eaten by a bear. It was a very, very scary thing.

Having been trained in and having dealt with such things in the Army, I was not showing any apparent fear though I was scared out of my wits.

There was one delicious moment --- in hindsight mind you --- when the bear and I locked eyes and I thought to myself --- oh, shit! My only thought was to poke the bear's eyes out w/ my stick.

I yelled at the bear three times and he finally blinked. If I could I'd like to send the bear a nice Norweigan smoked salmon w/ creamed horseradish sauce to express my appreciation.

It was one big, big bad smelling creature!

Karma!

David Semeria · 1 month ago

A woman really appreciates being saved from being eaten by a bear.

Ladies and gentlemen, I give you the ever-quotable JLM !

ShanaC · 1 month ago

Doesn't mean I'm dating any of you as a result (though the best relationship of my life introduced me to hiking- and one my life dreams is now to climb a mountain. So there might be a correlation. Maybe. I refuse to say on purely feminine terms and give away my best secrets, because I have a lot of good secrets on such things so far)

JLM · 1 month ago

Reserve final judgement until you actually see and smell the bear, darling. Take it from a married guy, all women appreciate being saved from being eaten by a bear. Perhaps it should be a test for your beaus to see if they are gentleman enough to save you from a bear. LOL

Go climb the Devil's Backbone in the Flat Tops in Colorado but remember that climbing 12-14,000' Rockies is a bit different than climbing the Appalachians or other East coast ranges because the air is much thinner above 8,000'.

In the Appalachians, you are amongst the mountains while in the Rockies they are majestic and soaring above you and you are in awe of their beauty.

Two different kinds of hiking. I like them both but seem to prefer the East coast because the hikes can be strenuous but you are in amongst the trees. I love seeing old growth forest. Places like the Great Smokies have very well developed trails built by the CCC during the last Depression.

Last year in the last week of August, I was at 6,000' in the Flat Tops when I started hiking and at 12,500' it was snowing. It's easier to hike in the cold but the snow is very messy. Exquisitely beautiful nonetheless.

ShanaC · 1 month ago

I think that would be all people-
And take it from someone who was riase to be married and have a child or two by now (I should show you the statistics I used to keep from my high school class, of which every person barring one went to college), that's not the only thing we want.

And the mountain which my ex got me to want to climb to the top of- it's in Wyoming. I tend to dream big.

We'll let you get away with calling me darling for now.

JLM · 1 month ago

Okaaaaaaaay?! Please accept my apology for any liberties taken. Absolutely no offense meant. Wyoming, still part of the Rockies, is good too. Stop dreaming, good luck climbing!

ShanaC · 1 month ago

S'ok. Apology accepted. There are only two things in my life I'm under pressure to do. Get a basic sort of a job, and be cute enough to marry. 40-50% of my high school class got engaged or married while in college. There parents helped support them while they completed. I ran away to go to some weird college. I may or may not be some ruined wanton girl, depending on how you look at life. I'm sensitive on the subject though, since I was raised to think "what makes a good marriage very quickly" I actually was supposed to take a class about something like that in high school *giggles*

I've been close enough to marriage once. I realized I was not really ready and the guy wasn't right. I'm 23. I'm a bit touchy on the subject.

fredwilson · 1 month ago

My parents were 29 and 27 when they married in 1957. That was very old to be getting married at that time. They've been together for 52 years now and have one of the happiest marriages I've seen. I would not feel pressure to get hitched from others or yourself. It often ends badly

Getting a job on the other hand is critical. And we can help with that. In fact, I think we already are

ShanaC · 1 month ago

That is 100% true. Gettting a job is critical, I see the difference between me and my high school classmates, and how it's played out in thier family and finacial lives. They are much more dependent on thier extended families throughout thier lives, and they often have smaller savings to make critical decisions with. It's now hampering long term communal growth, because no one knows where the next dollar will come from, because they stuck themselves in a long term ponzi scheme.

Certain things I love about my background. Being raised with such a stress to be married fairly young is not one one them. Dropping that for my kids. It still gets weird because it interferes in normal ways of dating..very odd date conversations. I've dropped dating for a while up until recently because I thought everyone I was meeting was insane from the internal pressure they generated.

Thank you btw, It wasn't my original aim at all. Originally I just wanted some data point and I had no idea what I had found. Then I found some some really exhilarating community where I was learning more than I was learning in a college classroom (which is a bit frightening, what's the point of college?). Then I realised this is where I wanted to be every day of my life in the person to person world. And I had to figure out how to do that. So thank you.

fredwilson · 1 month ago

You are welcome but you really have to thank yourself and everyone else here too

ShanaC · 1 month ago

You missed that day, It was in the post on Failure. and the problem with threads is that they are threaded: The comment above is meant to be more general:

http://www.avc.com/a_vc/2009/09/failure.html#co...

One last word: This posting habit here started as a Random Whim because I wanted to know about a specific lecture that Fred had given. I had written a similar paper about the subject- and just wanted to add the information on the subject from what I already had (which was decently extensive). I came back because of the people and the discussions. I didn't have to. I'm still not quite sure when and how and why I did; all I know is I did. And that I am glad I did. I found something absolutely amazing. Sometimes you need to go with your gut.

Whether I agree with you or not on a subject at hand- ever person who has commented here I have learned something from. You all kept me here. (Wasn't the plan). You've made me more passionate about life, about what I should be doing with it. Even what books I think I should be reading. You've made more curious. I owe every person here a thank you for helping me on that journey out.

So, Thanks!

fredwilson · 1 month ago

You are welcome

JLM · 1 month ago

Suffice it to say that I drive a favorite car ('66 Fire Engine Red Impala convertible) which is slightly older than you --- age, it is a terminal condition and will usually self correct itself.

You have plenty of time and guess what --- you will probably get better looking and more alluring with age. Don't fret. The older you get the more interesting you become and the more you will have to talk about.

As my grown son says: you are just beyond the "catch and release" point anyway. LOL

I was 30 when I got married and it has worked out just fine. I have children your age and they are all wonderful.

The world envies youth.

ShanaC · 1 month ago

I'm odd- I envy age slightly. They have wisdom I don't have. You have to gain that through experience. I realized the wisdom is far more useful.

It's a cultural thing. I grew up in a community that is primarily Orthodox Jewish. There is a huge premium on young marriages and having children. Marriages reinforce your sense of being inside the community. We even have our own social networking site to celebrate getting married and having children. Therefore, my religious being worries my mother, and my singleness, becuase I never seen to be dating anyone, and when I am, it never seems to be anyone she likes (ie marriagable and will give her grandchildren that will fit in very cutely where I grew up. They'll probably be dressed like preppy-hippy-punkettes and I'll have read them Alice in Wonderland at some ridiculous age, or something else she disapproves of. There are a couple of posts how I like it wilder. Compared to where I grew up, that's probably true.)

ShanaC · 1 month ago

PS, nice car.

andyswan · 1 month ago

Fred this is your best post of 2009. I'd love it if you made it more of a theme of this blog going forward, because every one of your readers benefits from an increased awareness of methodical business/fund building.

Also, I would add that "slow capital" is necessarily unlevered or only slightly levered capital. The more leverage behind what you are doing, the more "slow" is painful (and thus avoided).

fredwilson · 1 month ago

Wow. Thanks andy

I have avoided posting too much about investing because I've assumed that most readers are entrepreneurs not investors

But I guess I shouldn't worry about who reads this and just post about what I wake up thinking about which is what I normally do

andyswan · 1 month ago

Yep!  Entrepreneurs are investors too, making the biggest investments of our lives on a daily basis.  

The principles are borderless and timeless, and so are the temptations of shortcuts.

hdemott · 1 month ago

Since you brought up Buffet:check out some comments by his partner Charlie Munger in a speech he gave to a UCLA business school class. Buffet gets all the headlines, but I think it is possible that Munger is actually smarter.

What he says is that in any situation you can generally judge the outcome of that situation by looking at the incentives of the players involved.

There's absolutely no incentive to be "slow" in the financial world.

You may practice "slow VC" but you have few partners and associates - and are happy to run a relatively small pool of capital - be highly involved in your companies - and continue to deal with legacy investments made last century.

Contrast that to the typical firm whose goal is to raise the next fund. Same with PE firms - hedge funds etc... Then think about the typical construct of a typical long only investment fund. They are solely judged by the index they measure up against - so no individual security can underperform the index - so it is all a "rental" culture of ownership.

Strangely enough - one of the big benefits of being "slow" is that you generally end up with better returns over the long haul - but few people are willing to wait for the long haul to measure themselves.

AndreaF · 1 month ago

Agree completely that Buffet = Buffet + Munger; Buffet is the brand name of that great blend of minds those two are.

Also agree that slow capital doesn't fit with certain types of financial institutions' models. But that is the point perhaps. Those models are flawed. Smaller pools of money and a more hands on and reasoned investment strategy makes more sense to me. Financial models can work but understanding what you are investing in is more important and that can scale only to a certain degree.

hdemott · 1 month ago

Scale and investment returns are two separate business models. Both work - but one allows you ultimate control and the other gets you insanely wealthy even with mediocre results. Gee, I wonder why most of finance is built on the scale model!

fredwilson · 1 month ago

i wonder why i chose the former!

ShanaC · 1 month ago

Not that I understand your golf game, or ever do, but small means control. Think on that...

fredwilson · 1 month ago

yes, we are blessed by our fund size and team structure

i keep reminding myself of that every day

Ankesh Kothari · 1 month ago

Warren Buffet hires the fastest traders out there!
Yes he has patience in finding the good deals. But after that, its all speed. He does not start small. He buys as much as he can with amazing speed once the deal has been found.

Speed has to be managed. Go slow to not miss finding the deals. And then go fast to not let others beat you on the deals.

fredwilson · 1 month ago

i suppose that is true when you are a public market investor

Karl Mattingly · 1 month ago

I think you are on the money.

It is why 10 years ago I started slowCapital.

And why our motto is the very unfashionable "Patience sustains performance."

At it's heart, it is the difference between real Venture Capital and Wall Street Investment Banking. One takes a 5 to 10 year view with a bonus on the back end. The other takes it quarter by quarter, with a bonus on the way in.

Or as my grandmother used say: "A civilisation grows great when old men plant trees whose shade they will never see. And Wall Street doesn't plant trees anymore, kid."

DaveinHackensack · 1 month ago

"Or as my grandmother used say: "A civilisation grows great when old men plant trees whose shade they will never see. And Wall Street doesn't plant trees anymore, kid."

Warren Buffett credits that saying to Walter Lippmann. After Benjamin Graham passed away, Buffett wrote in the Financial Analysts Journal*,

"Walter Lippmann spoke of men who plant trees that other men will sit under. Ben Graham was such a man".

*This was reprinted in the preface of the Zweig edition of Graham's The Intelligent Investor, which is where I read it.

Karl Mattingly · 1 month ago

Yes Dave. An oldie but a goodie in popular culture, with many reference points.

I guess the question is not our didactic prowess, but rather whether it still rings true.

And I'm sure that like my grandmother, Walt would attribute it correctly to the ancient Greeks.

fredwilson · 1 month ago

It only took me ten years to catch up to you

I'm with you

Karl Mattingly · 1 month ago

Thanks Fred.

Hmm. Didn't mean to brag, sorry. The 10 year reference was in the vein of ... "it's been lonely out here for a lot of years and it is great to see writing like yours - really great!!! Go for it folks."

Best wishes.

fredwilson · 1 month ago

You should be bragging. I'm impressed

Alex Hammer · 1 month ago

Fast (responsive, aware, leading) politics based upon slow values.

mallorca · 1 month ago

Thanks Alex!

glenngutierrez · 1 month ago

That's true. Building up slowly is critical not only in life, business but just in doing anything right. Sometimes we're so fixated on moving that we forget to smell the roses. It's cliche but it's the truth.

Lucas Dailey · 1 month ago

Fred, I think you’re off-base on this one.

You practice your form of capital investment because it works best for you. The five tenets you mentioned are about spending more time getting to know a company and investing more time helping it grow. From that you get a much higher than average win to lose ratio, which to you is more satisfying and I’m guessing more profitable.

That being said, I think you *are* part of the Slow movement, but instead of Slow Capital I would posit that you practice Slow Business.

I’m guessing that the philosophy that governs your interactions with people extends to all of your business dealings, not just those you’ve invested in.

Because your Slow Business happens to be investing and you have a mature and patient investment strategy doesn’t make you Slow Capital.

If your investments were primarily concerned with helping companies that exist to further the Slow movement, then you would be Slow Capital. But some would even argue that many of your investments are opposed to the Slow movement.

I consider myself a practitioner of the Slow movement and am an entrepreneur. But that doesn’t make me a Slow Entrepreneur or Slow Startup. The goal of my business is not specifically to further the Slow movement.

Does this make sense?

fredwilson · 1 month ago

Its a semantic debate which I don't enjoy

I like using words which make sense to me

Its like the pushback I got for using 'mobile web' incorrectly last week

I don't care for the debates about words. I'm more interested in the behavior I'm trying to describe

Lucas Dailey · 1 month ago

I think its the difference between the purpose of a business and the operations of the business.

You operate with Slow principles, but your purpose isn’t to invest in companies that are enhancing the Slow movement.

Instead of being a Slow Business I should have said a Slow Organization. I meant Business as a typology, not a vertical.

Yeah I don’t like semantic arguments either, I think I was a little clumsy so it came off as one. Whatever gets the idea across accurately to the most people. I think ‘mobile web’ was spot on. And I think your professional purpose and M.O. are ideal.

Lucas Dailey · 1 month ago

Here’s a good parallel.

So before I was working on a web startup I was a Green Architect. The purpose of my business was to build Green buildings, and I operated my business in a Green way.

If the purpose of my architecture business wasn’t to design Green buildings, but we still operated in a Green way, I would say we had a Green Business or Green Organization, but not that I was a Green Architect.

kidmercury · 1 month ago

buffet is a punk ass chump, a globalist insider with a small role in 9/11. he was pro-bailout, which is another way of saying he was pro printing money and giving it to the bankers/financiers who caused this mess.

i'd like to see slow exits as a part of slow capital. right now the dominant model is "raise a lot of money, get a lot of users, then sell it all for one big payday! hooray!!" i'd prefer to see "raise a bit of money, collect dividends along the way, invest more, collect larger dividends, etc."

i think when we are all said and done with this economic/financial mess we will have a financing model that is more rooted in slow capital.

andyswan · 1 month ago

Kid I would be honored to be added to your list of 9/11 conspiracy members. A couple of compelling facts: I was in the WTC that month, and I had mostly short positions in my trading account at the close of business on 9/10/01. Proceed....

kidmercury · 1 month ago

i'll add you to my conspiracy list, but only if you share who's in your conspiracy list. who do you think plotted and executed 9/11?

Miles Lennon · 1 month ago

Kid,

History and contained psychological experiments have shown that slow capital is almost impossible. Behavioral economist have shown with historical simulations and live experiments that people cannot and will not avoid "bubble" mentality which will ultimately lead to really fast capital - at least in so far as the capital is moved rather quickly and impatiently. Bandwagons will always exist IMHO.

That being said, I appreciate your optimism.

kidmercury · 1 month ago

of course, people's greed is not the only ingredient needed for a speculative bubble. the other required ingredient is an abundance of capital needed to speculate and create bubbles. IMHO, this is the critical ingredient that opens the floodgates for a speculative disaster.

the current monetary crisis is about the dollar bubble collapsing. as it collapses, it will bring down the whole FIRE economy (finance, insurance, real estate) with it, which is what drives the US economy.

from the ashes of the FIRE economy will spring a new political system and new monetary policy agreements. this will help reduce bubbles, and will help fuel the rise of slow capital. more importantly, sound monetary policy virtually ensures a sound economy, something that has been extremely rare in our world. civilizations with sound money tend to flourish.

JLM · 1 month ago

Having been in the FIRE (actually the RE) biz for a big chunk of a century, I agree completely w/ kid merc. In the tranformation of real estate from an entrepreneurial business to a securitized business with the wholesale creation of REITs in the early to mid 1990s, you saw the impact of dramatically increasing the amount of equity and decreasing the amount of debt in real estate by the impact of Wall Street's perusal of public REIT balance sheets.

It became................................................boring!

There is nothing that gets you to work on time like owing somebody $300MM.

Unfortunately, all the real talent left or is leaving the industry and you are left with clerks in very nicely tailored suits who could not size up a market risk if there lives depended upon it --- cause they no longer do.

All risks are overcome by pouring in more equity.

This is also why the 20 year olds with the mousse in their hair created real estate derivatives --- they were not real estate pros and had no idea how to collect if something went wrong.

Unfortunately, something went..........................................way wrong!

Probably great for the health of the economy and stock market but boring none the less.

There was a day when if you couldn't finance a $20MM deal crossing an intersection with the light changing, you were not a player. Of course, this was when $20MM was real money.

ShanaC · 1 month ago

I agree with this- I also wonder what causes us to build institutions, and what causes anomalies so that certain groups and certain people build institutions and that social norms change. They happen more often than not- we're not a pure bell curve, even in live experiments (and I appreciate experimental economics more than the pure form, though I wish they would hook up more closely would their kissing cousins in the rest of the social sciences. Correlation is not causation, as the rest teach.)

I mean, it almost feels like we are always shifting various gears in society, sometimes fast, sometimes slow- and it always for certain aspects of society ( certain things are fast, certain things are slow)

And yet they change: Why is that, who is the first to try it and then what causes others to get on the bandwagon, and then what causes it to stick.

Really important to know if the end goal, especially if your end goal is a slow end goal, is to build and institution. Institutions are only built slowly.

fredwilson · 1 month ago

And I appreciate the challenge. Nothing is impossible

Mark Essel · 1 month ago

Slow exits, means sustainable healthy growth to me. That'd be excellent, but what about those serial entrepreneurs who can't help but liquidate and start all over while someone else manages the bigger growth phase?

Hating on Buffet?!? I didn't realize he was pro-bailout, ahh Buffet call's bailout the right thing to do. Yikes. It's gotta be personal for him, a crashed economic system speeds up the process of change, but incurs a great social penalty in the short term.

fredwilson · 1 month ago

I like slowly disposing of the position, much like the way we acquire it. I'm not a huge fan of dividends for VC backed companies because I think the should be re-investing the cash flow in more growth

Mike Altschul · 1 month ago

And let's not forget enviable slow culture (their geography of which slow travel likely visits).

* Ahmed, Indonesia: Anxious not to be late for my first day of a diving course, I was scrafing down breakfast. Local kid who I'd been singing songs with the night before walks by, smiles, calmly waves his two palms face down, and instructs, "Slowly, slowly." I gulped my water, told him I had to be at dive class in 3 minutes. "No problem. Slowly, slowly." Implied in his answer: even if they're on-time, they'll wait without thinking twice. I arrived 2 minutes late. Class started 30 minutes later.

* Cahuita, Costa Rica (en route to): I was in a transfer town in Costa Rica, an hour away from my destination. Had to get from one bus station to another, so I jumped into a cab, slammed the door shut, shouted out the destination. Cabbie turns around, with knowing (if ... ahem ... bloodshot) eyes, and says, "Slow down. Slooooooowwwww down." He paused 3 seconds (seemed like 30), turned around, put the car into gear, and reassured me, "You will make it there." I missed the bus by a minute, caught the next one an hour later. In the meantime, I enjoyed a $2 local meal and eventually, yes, I made it.

* Related, honorable mention to Radiohead's "The Tourist," about a flock of tourists running around so fast that they were missing everything. "Hey man, slow down, slow down | Idiot, slow down, slow down."

Living in NYC, perhaps the fastest pace in the world, it's easy to get sucked in and lose sight of the value of slow. Thankfully, we're just a flight away from reminders. And when there's no time/money for those, thought-provoking blogs can always assist...

reecepacheco · 1 month ago

Great anecdotes, Mike. Travel/location plays a large part in this. I've been all over the world and you have to accept the pace of the locals. You're right - in NYC it's a race.

Ryan Graves · 1 month ago

Chris Dixon posted this yesterday on his tumblog. Appropriate for this conversation re: NYC...

“There are roughly three New Yorks. There is, first, the New York of the man or woman who was born here, who takes the city for granted and accepts its size and turbulence as natural and inevitable. Second, there is the New York of the commuter—the city that is devoured by locusts each day and spat out each night. Third, there is the New York of the person who was born somewhere else and came to New York in quest of something. Of these three trembling cities the greatest is the last—the city of final destination, the city that is a goal. It is this third city that accounts for New York’s high-strung disposition, its poetical deportment, its dedication to the arts, and its incomparable achievements. Commuters give the city its tidal restlessness; natives give it solidity and continuity; but the settlers give it passion. And whether it is a farmer arriving from Italy to set up a small grocery store in a slum, or a young girl arriving from a small town in Mississippi to escape the indignity of being observed by her neighbors, or a boy arriving from the Corn Belt with a manuscript in his suitcase and a pain in his heart, it makes no difference: each embraces New York with the intense excitement of first love, each absorbs New York with the fresh eyes of an adventurer, each generates heat and light to dwarf the Consolidated Edison Company.”
>>Here is New York, E. B. White, 1949

Mike O'Horo · 1 month ago

Thank you, Ryan. This really resonates with me. However, you've also exacerbated my already-growing missing of NY. When I lived in DC, I could jump on Amtrak and, half a book later, be at Penn Station. Now that I live in Las Vegas, I haven't been back, but I'm Jonesin' pretty bad. May have to do Tree Lighting Week or something, to scratch the growing NY itch.

DaveinHackensack · 1 month ago

The New York, NY casino doesn't do it for you?

Mike O'Horo · 1 month ago

Only in the most micro- of ways. Nothing can capture the energy and essence of NY, not even the dream-makers in Vegas and Hollywood.

Mark Essel · 1 month ago

Hehehehe.

It's like going to Disney Epcot to experience Europe :D

Ryan Graves · 1 month ago

I'm evaluating NYC actually. Just need the right opportunity. :)

ShanaC · 1 month ago

I'm getting homesick. I learned much better manners, and in some ways, learned more about who I am, by leaving NY metro. I miss NY. I have no idea where I am going to be next. I love that quote because it is even true if you grow up there, you still could be the corn belt person.

I hate the fact that I'm all three. I want to go home more than a bit :(

Ryan Graves · 1 month ago

Book the flight. :)

Ryan Graves
414.559.3924
Twitter: @ryangraves
http://thedreaminaction.com

ShanaC · 1 month ago

5 weeks left of classes- I've scaled back on all the social network tech expansion I wanted to do, damn it. Damn midterms. Damn Hyde Park.

Ryan Graves · 1 month ago

Gotta hustle. :)

fredwilson · 1 month ago

That is me too

Scott Scheper · 1 month ago

That's a good story; but, if you look at it from a *economic* perspective, there's a reason why Indonesia is one of the most un-monetizable countries (in terms of the social media space); they don't purchase anything. We're talking about a country who's ad spend is a fraction of a fraction of the U.S.

Is this a bad thing?
From a lifestyle, family-oriented perspective: no
From an economic perspective: yes

You've got to choose which one you want:
a) Money = speed = United States
b) No Money = calmness (besides a hurricane here and there) = Southeast Asia

ShanaC · 1 month ago

Anywhere in this world that offers a mix- family friendly and the speed of money? Seriously...

fredwilson · 1 month ago

"no rush man"

iamronen · 1 month ago

"This is given only through slowness in human relations" is a great and very specific starting point. As I was reading this I traveled a different route from "slow" to "capital" - I would have explored "slow capital" as that which comes from "slowness in human relations ... amongst the people who partake in the business of capital". When I was working in technology-business, "slow" was not in the mix - things were fast, and never fast enough. I get the impression that your work-time is also super-charged-fast.

I would love to hear your take on "slowness in human relations" in your line of work. Is it there? Is there room for it? Would you consider changing anything about it?

~10 years ago there were numbers floating around lectures & presentations claiming that only 1 in 4 software/technology projects were on time and on budget. I bought into this and quoted it numerous times. I now wonder if most projects are actually on time and budget, and it's our rushing (un-slow) expectations (as expressed in planned schedule and budgets) that are off the mark.

This was one of the reasons I left... everybody was rushing AND never making it on time... I felt it was unprofessional (it compromised vision, quality, motivation...), unpleasant and in the end, for me, unhealthy!

fredwilson · 1 month ago

i like hanging out in my partners office and having random/roaming
conversations

i like taking long walks with people i work with and talking

i like relaxed business meals

those are three specific things i do to slow down

JLM · 1 month ago

Isn't the ultimate luxury, the ultimate "success dividend" --- the ability to take life at your own prescribed pace? The ability to set your own schedule. The ability to take work and play in whatever measure you desire and to allow yourself to re-set your own priorities.

To engage at whatever depth you desire in any given situation? To befriend whomever strikes your fancy without looking for something in return?

I wore a blue suit and French cuffs and raised money like a fiend and built businesses for a long time to earn the privilege of conducting my own business affairs in khakis and ultimately to not even leave my home. I consider the greatest luxury to have control of my time, location, intensity and priorities. I never begrudge working on Saturday mornings because I can always play on Thursdays, if I want.

This is balanced by the curse that for many we are never working and always working; never at play and always at play. For the ultimate convergence is that work is play and play is only the frame around work.

Man was meant to work and is happiest when working hard but we all have to feed the child. Because we are only part man and will always be part child.

The funny thing is that I find myself working more but doing only the kind of work I actually enjoy doing while playing more. It is a wonderful luxury to be able to set your priorities in such a manner that there is no conflict between "family" time and your other responsibilities.

Today there is almost nothing which I would accept as a conflict rather than talk to my adult and almost adult children. Of course, they are all so busy they have almost no time for me. Until they need something. Of course that is how we treated our parents.

Isn't it odd that when asked "...what do you do?" People answer with their work occupation? Are you really a "carpenter" or a "craftsman with wood"? A deal junkie or a molder of talent, a mentor and a builder of companies and an innovator of products?

fredwilson · 1 month ago

So that's how its gonna be with my kids JLM? Hmm.

JLM · 1 month ago

The empty nest is very, very, very nice. But nowadays your kids can find you and you can find them via all the technology and you have the ability to drop in on them unannounced.

I am absolutely certain that no child needs a parent to be a "friend" and parents who make that mistake live to regret it. But when the hard work of parenting is done, when your children are educated, when they have begun to establisih their independence --- then they actually make pretty good friends and their friends make good friends also.

Wives are brilliant in ensuring that lives are cemented by common experiences --- like skiing vacations --- which then act like mortar to hold our lives together. Celebrating the landmarks of our lives is very important.

The other great thing is how WE treat our parents. I have gone from a horrendously failing grade to just passing. But it is a great improvement. I am teachable.

fredwilson · 1 month ago

I'm getting better at that last part too

ShanaC · 1 month ago

You sound really normal and like the people I grew up with. Who planned out that time every week. I really value and struggle with trying to keep those elements I grew up with, since I seem to be inclined to rushing, but I enjoy the slow moments more, especially becvuase I see how the impact on quality of life where I grew up was huge.

Mike O'Horo · 1 month ago

The tech project performance stats you reference are from the Standish Group, Gartner and others. They haven't changed at all over the past 10 years: 30% are functional failures, i.e., they don't do what they were spec'd to do; 40% are virtual failures, i.e., so far over budget and past deadline that the only thing keeping them in play is the project mgmt's reluctance to pull the plug and eat the loss on their watch. So, it's really not slow v. fast there. Those failures are almost universally attributed to the absence of reliable people processes, specifically, group decision processes. It's not that groups make decisions too fast or too slow, but poorly. In effect, because they lack a decision process, they don't actually make one as a group, but instead they (temporarily) acquiesce to a solution imposed by a loud voice. Those ersatz decisions fail because the stakeholders are not invested in them. In the late '90s, I was in a venture with some smart guys from MIT who created reliable group decision processes. The difference in project performance is dramatic when you have a true decision vs. acquiescence.

iamronen · 1 month ago

Mike - thanks for taking the time to relate. I assume that there are many reasons and factors that contribute to the end-results... and I do not mean to over-simplify by attributing all to slow vs. fast.

I do feel that (at the risk of generalizing) there are key elements missing from the playing field - of both those who do business and those who measure it. I recall two of those elements have been uncovered here at avc.com - Care & Purpose. I would confidently add Time and/or Space to that list. If you dig deep enough in any of the issues and scenarios you mentioned and peripheral circumstances that may have contributed to them, I believe you will find one or more of these elements missing.

I'd love to hear more about the venture in which you witnessed improvement. I wouldn't be surprised to find that it's not the smarts of the MIT guys (I am confident there are at least as many smart MIT guys making bad decision processes) - but it goes deeper to things like Care, Purpose & Space.

Mark Essel · 1 month ago

Thanks Mike for bringing something to light that has been nagging me about the power of collaboration. The necessity for a well organized decision making process. The two go hand in hand. I find myself quickly leaving (if it all possible) groups that resemble acquiescence to loud voices.

ShanaC · 1 month ago

New project- well organized decision making- that would solve a lot of problems.

Steven Kane · 1 month ago

Patience is essential for successful investing, I think.

Mark Essel · 1 month ago

I think so too. It takes so much time to develop patience though ;).

Charlie Crystle · 1 month ago

Can we talk about something else?

Mark Essel · 1 month ago

I'm game, hit me.

Charlie Crystle · 1 month ago

...and then disqus becomes a community regardless of the post.

Fred, disqus should have another button: offshoot. for secondary conversations. deviations from the discussion. a side conversation function, not just threads...

ShanaC · 1 month ago

Second that. We need like a cross between blog pages/comments, disqus pages, and messageboards to that you can do things with offshoots.

Charlie Crystle · 1 month ago

that's the idea. Currently there's an implicit limit to the conversation, but I might find Mark Essel's comment interesting, and have another thing I'd like to bring up with him and others for discussion. Currently I could just start an unrelated comment thread off of his reply--as it is with this thread--or find his email address, blog, or whatever, and start something...

but that would not have the context of a group discussion. The comments here could spawn other conversations. And maybe they loop back to the main subject. Which could be accomplished with tags.

Charlie Crystle · 1 month ago

So why should Fred have all the fun with tags? Why not also let us tag comments? By doing that it could enable comment views by tag...now I'm onto a different offshoot.

ShanaC · 1 month ago

I heart you Charlie- but the real reason is Spamdexing/Spandexing. (I had to do the pun)

Effectively that is the point of the backpages, and the backpages allow you to follow other people and pages (which are often two different things, as the Case of Woody/JLM proves)- they don't however nicely tie everyone and their comments into one big happy family mess. Besides, I can name of at least one blog I follow that does use disqus that I don't comment on. And my points there would be useless (Why would tech blog points be good on a fashion blog)

The only way to fix this problem would be to figure out what exactly Disqus is besides from a commenting engine, and that means taking a more serious look at the backpages and how they should be designed. Including an idea of non-personal, trending topic backpages.....

I love products, I love business *sigh*

Mark Essel · 1 month ago

I'm listening :D

William Mougayar · 1 month ago

That's a brilliant idea. So, it would allow lateral thinking to get re-deployed accordingly.

Mark Essel · 1 month ago

I concur William. This pocket of interest attention could flow out to off topic conversations and come back or not. We'd like Fred's blog to be a coffee shop where we meet up, grab a drink and then run out to different virtual locations only to end up here the next day.

ShanaC · 1 month ago

Collaspsing has come up once before- I think it should be a personal collaspe based on user cooking. I know what I read, I don't know what you've read.

Mark Essel · 1 month ago

Maybe a collapse feature, or default collapse feature for easy parsing?

Massive categories can get squeezed or not depending on user settings. Great thing about Disqus is, they have all the comments now, so they can tweak our interfaces or give us the controls without disrupting Fred's message if he's so inclined. And we could always opt out, and use another comment handler.

Charlie Crystle · 1 month ago

I think it has to be a literal offshot--outside the context of the current discussion structure. a line out to the right...a taskbar, a new window, some other physical space.

Fred
>>>comment
>>>comment
>>>comment/comment
-----------------------------------
>>>> >>>side comment (create offshoot)
>>>> >>>comment to side comment, discussion etc
----------------------------------
>>>comment

ShanaC · 1 month ago

Charlie that still belongs on a separate page, not here. We're an utter distraction to the comment flow. This stuff needs to be tagged and indexed separately. There are great personal pages. The fact is, they are not being using efficiently because they are socially networked orgaized (which is not bad) and not tightly enough either-

And they are not tagged to the comments. The comments themselves are not indexed by topic, thread, and subthread. It's totally possible to do. Each of these have url shortentenr attached. It should be totally possible to re-indexed them separately by topic via those urls once they are auto-tags into some general category, via trending topics. it would make Disqus a lot more powerful too, since you could search the comments for Data far more easily, without immediately having to look at users, and then doing due dilligence on the User end, to see if you agree or not. Much easier.

Can someone from Disqus weigh in on why you design is the way it is- you have a bunch of comments about you, and it probably helpful to know what your thinking is, rather than have us kvetching about it at random.

Charlie Crystle · 1 month ago

real estate is an issue, likely, yes. But indexing and presentation are separate issues.

DIsqus is currently a hub (fred), trail (comments), and spoke (commenters pages on disqus) approach. Connect the spokes around new hubs (offshoots) and you get out the two dimensional and into the multi-dimensional.

One thing that would be interesting to see once it's implemented is the half-life of offshoots...stats on the trailing interest in the subject and offshoots.

fredwilson · 1 month ago

I shares this with daniel

mrcai · 1 month ago

The BBC's Evan Davies did an house long interview with Warren Buffet that showed the other day. It's on iPlayer for those who can watch it http://bit.ly/3dMmDA. I guess his whole attitude towards investment would be considered slow.

AndreaF · 1 month ago

I am glad you mention Warren Buffet. Anybody who has watched him over the years and/or read The Snowball will understand the importance of slow capital and the path to greatness.
I am hoping to get some slow capital, fast.

DaveinHackensack · 1 month ago

Being patient is important, but so is thinking for yourself and having confidence in your own opinions. I was bearish on the sheet rock company USG last year, given it's weak balance sheet and the monster real estate bust, but I didn't short it or buy puts on it because Buffett owned it. That was a mistake on my part. I should have followed my own reasoning.

It's worth remembering that large investors such as Buffett and Munger often have other considerations in these situations the rest of us don't.

Patience makes sense with well run companies that you think have good prospects. I was patient with one of those this year, and when it dropped 90% from where I first bought it, I bought more. My patience has been rewarded with that one so far. But being patient with financially distressed companies facing macro headwinds is best left to billionaires, IMO.

JLM · 1 month ago

What you describe is exactly the sentiment of Peter Lynch when describing his investment thesis when he was running the Magellan Fund for Fidelity. He did OK with the Magellan Fund.

Invest in things you actually know something about. Invest in things you can personally inspect.

I doubt that 20% of the people on Wall Street could make the connection between sheet rock & USG & their balance sheet & the American construction markets.

An even more obvious play is the ability to identify regions of the world which are going to prosper v all other regions --- my favs are Mexico, Brazil and China. Then make bets (ETFs) which capture these impressions.

David Semeria · 1 month ago

Lynch's "One up on Wall Street" is the most sensible and useful investment book I've ever read (and I've read quite a few).

Having worked for many years on the public markets, I can guarantee that after a while people get lost in abstractions. They'll invest in some stock just because a top analyst likes it, or another prominent investor has taken a chunk. Lynch debases all this and always takes you back to first (and very simple) principles.

The mark of a great thinker is that he/she makes things as simple as possible, but not more so.

fredwilson · 1 month ago

that's why my partner Brad is such an important part of our firm. he is
always about going back to first principals and making sure we are thinking
straight. it is so easy to get caught up in stuff and lose focus.

DaveinHackensack · 1 month ago

The company I averaged down on when it dropped 90% is based in Australia, which of course has benefited from the economic growth in China (and India).

AndreaF · 1 month ago

Agree totally. Never said or meant to say that you should follow Buffett and Munger blindly in your investments. You should do your own due diligence and understand clearly what you are getting yourself into. This does not apply just to investing but to life in general and it is so because a) it makes sense, b) succeed or fail you should only praise/blame yourself.

JLM · 1 month ago

Buffet/Munger/Berkshire Hathaway typically buy huge positions and entire companies and because they manage such an enormous pool of money --- including the investable liquidity of the companies they own --- they are often a false touchstone for private investors who must be preoccupied by their necessity to unwind, liquidate or simply sell a "stock position".

B/M/BH is not going to sell Net Jets and they will have a very difficult time in disposing of some of their huge stock holdings but they have built an institution which really doesn't need the capital gains.

William Mougayar · 1 month ago

That's a great analogy to capital investment, but try to explain that to the younger generation who are the "fast and furious", and don't always appreciate the long term benefits of slowing down sometimes.
Preparing food slowly brings out the flavors, and eating it slowly gives time for your digestive system to move it downstream without bloating.

DaveinHackensack · 1 month ago

The younger generation should watch that Iconoclasts episode with Alice Waters and Mikhail Baryshnikov.

ShanaC · 1 month ago

Brillaint artists both, but there is craft in the readymade- just saying that you have to respect the revolution that is Du Champ. and he is pure speed.

Charlie Crystle · 1 month ago

Slow capital is part of the socially responsible investment movement. This is one of the more progressive groups...

http://www.renewal2.ca/blog/slow-money-conferen...

fredwilson · 1 month ago

cool. this is already out there. thanks for the tip charlie. i'm really
interested in this all of a sudden

Charlie Crystle · 1 month ago

Try this http://www.investorscircle.net/

Event is in a few weeks (let me know if you want intros).

Charlie Crystle · 1 month ago

I'd also propose that founders (and vc) commit a % of their stock EARLY as a donation to a foundation in a donor-advised fund--before it's worth anything. To get the longer term tax benefit, place it in escrow with a signed commitment to complete the donation at some later date.

My co-founders at Mission Research donated 10%, I donated 30%. The question is 10% of what? Which is why it's a lot easier to do it at the beginning when there is no known value to the company.

Founders especially need to ask themselves "how much is enough?", and understand the difference between reasonable wealth and excessive wealth, the latter being anything more than what you define for yourself as reasonable.

You're still highly motivated by the potential outcome, because the outcome will have a huge benefit to your world and you'll control it.

BTW--the majority of our investment came from triple bottom line investors (people, planet, and profit as equal principles).

fredwilson · 1 month ago

You can also give away appreciated stock which has great tax advantages

Charlie Crystle · 1 month ago

This is appreciated stock, held in escrow (that's not how we did it, sadly).

The idea is to make a contractual commitment to donate at some later date, put the stock in escrow so you can't access it, but you still own the stock and its benefits until the later date when it has appreciated, so you get the tax benefit plus you aren't able to reduce your intended commitment from early on. People are less likely to commit as much when the blue sky becomes real money.

fredwilson · 1 month ago

i see your point

but i give away a lot of real money and i prefer to do it in appreciated
stock

Charlie Crystle · 1 month ago

I'm saying appreciated stock. the only difference is the commitment is at an early stage (pre-revenue), and it's committed to a donor-advised fund, so the founders still get the tax benefit of the appreciated stock later.

But I didn't mean you, I mean the startup founders.

reecepacheco · 1 month ago

What I particularly like about this approach, is that it's simply more natural. Taking ones' time allows events to unfold naturally, rather than in haste.

Once in a rush, the mind generally moves away from thinking rationally and deeper into emotional cognition - not necessarily the best choice in business.

Similarly, being slow in a startup can be a boon (in disguise) to product development. More $ = quick hiring = more engineers = over engineering = crap product. My CTO wrote on this a little after our meeting last week Fred.
http://danspinosa.com/post/224391656/over-engin...

We're still hiring, but we're going to take our time making the decision.

Tom Labus · 1 month ago

I like the concept at lot but when applied to Congress it only makes their actions more exposed and horrible.

csertoglu · 1 month ago

great post fred. i'd never thought about investing in these terms. i dislike any deal where i feel like i am being rushed.

LIAD · 1 month ago

Slow is a great mentality and mindset - enjoy life...take a chill pill....what will be will be.

Is it not however completely at odds with the cut and thrust world of capital allocation?

Greed is good, winner takes all, if you snooze you loose, yadda yadda yadda.


Of the 5 reasons above I think 4 of them (1,2, 3 ,5) really fall under the heading of "PENSIVE CAPITAL" - rather than SLOOOW Capital.


(slow) food for thought - In Think and Grow Rich - Napoleon Hill states "People who fail to accumulate money, without exception, have the habit of reaching decisions, if at all, very slowly".

Ben Atlas · 1 month ago

It takes time for things to develop and then there is Wall St. that gradually moved from years, to quarters, to days and now milliseconds.

Phil Terry · 1 month ago

Fred - as the founder of Slow Art and longtime fan of my mentor Warren Buffett (note: he doesn't know me but he has mentored me for years), I'm happy to see this post.

I hope you are well.

Paul Lightfoot · 1 month ago

I actually attended a talk by a slow money (http://www.slowmoneyalliance.org/) leader (Woody Tasch) a few months ago.

The concept was appealing to me in the sense that investing local is better for the world and the happiness of the investor and the investee. Invest in local power plants, local businesses, etc. Know he guy who grows your tomatoes, etc. Have coffee with the people with whom you've invested your 401K. I love these ideas.

Unfortunately Tasch (who has published a book on the movement) didn't really believe that capitalism and slow/loca money could work together. He thought people couldn't and shouldn't expect a good return on investment. He seemed to espouse an American version of voluntary socialism.

I explained that I was a capitalist (Tasch: "I can tell") and that I thought his ideas of slow and local would be improved by entrepreneurs and a profit incentive. He disagreed. We agreed to disagree.

John · 1 month ago

Yeah, slow sure is trendy - I like how the Yankees practiced slow batting in game 1...

kidmercury · 1 month ago

no that wasn't slow batting, that was them sucking compared to the phillies. they will continue to be "slow" throughout this series, until it finally ends in their inevitable embarrassment and humiliation.

fredwilson · 1 month ago

Jay-Z fixed them on thursday night. He got them back into the NY state of mind. Phillies are done

Charlie Crystle · 1 month ago

phillies in 5

kidmercury · 1 month ago

you know it!

fredwilson · 1 month ago

Don't count on it

kidmercury · 1 month ago

pfft. jay-z is an amateur, i won my beef with him without even trying. would be great marketing if the phillies got one of jay-z's beef partners to open for them (i.e. noel gallagher, nas, etc).

yankees are a bunch of spoiled, overpaid children. their time, like their payroll, is up.

fredwilson · 1 month ago

We'll see. Did you see my tweet about jay-z this morning?

kidmercury · 1 month ago

hahahaha no way boss! i think your son got you too much into hip hop this past week. no way is jay-z the new sinatra. pfft.

fredwilson · 1 month ago

actually it wasn't my son, it was the blogger also known as http://www.jessicasarawilson.com/

leeschneider · 1 month ago

Great post Fred. I was discussing VC in general with a friend over lunch yesterday. It seems most of the public's perception of VC is the "wham bam" successful deals that have made people billionaires overnight and put them in the front page (i.e. Google). I don't think most realize that your "slow capital" method even exists!

cyanbane · 1 month ago

I guess I am more apt to figure out which speed seems natural for the context of whatever it is that is happening. Which in the end I guess technically is part of the essence of the movement.

I was tempted to comment that it took me 4 hours to read this post.

Anita Lobo · 1 month ago

This point 'flows into a company based on the company's needs, not the investor's needs' is my favourite.

Many start-ups end up inflating their ask to meet the investor's ticket size requirements and equally the reverse.

Tangential but the reason why money lenders of yore stayed in business for generations - was patience and sniffing out a real deal, even when it came shabbily dressed & careworn!

Cheers
Anita

Baba · 1 month ago

Slow movement/Slow Capital interesting blog post but in reality think about it. Would a VC fund like yours or others invest in a company that pitches to you stating they have a slow moving product or that they are making communicating much slower etc.
I think when push comes to shove the basis of SLOW MOVEMENT philosophy falls flat.
In a world where there is huge amounts of inequality slowing down is not an option for most folks.
Maybe for the well heeled it is something they can think about after having achieved a certain level of financial independence.For most others being SLOW in any form is unacceptable.

LIAD · 1 month ago

Agreed.

It's all well and nice in theory but I'm not sure how practical it actually is in reality

fredwilson · 1 month ago

not necessarily

several of our companies have been slow to develop revenues and have done
fine

Scott Scheper · 1 month ago

I think it's a balance game, though. Knowing when to let things develop, and when to cut the line is the key.

It makes me think of the Seth Godin's book, "The Dip." Though I purposely did not read it (because you can get the main idea in Amazon reviews), the idea is powerful.

I'm fortunate enough to work with a mixed team at my startup. Some are movers and shakers; others are slow, steady and painfully detailed.

Elie Seidman · 1 month ago

Great stuff, Fred. The only consistent way to make money is to build real value and with rare exception, building real value takes time, patience, and persistence. We need entrepreneurs and capital dedicated not to getting rich quick but rather to making a fair return year in and year out as a result of building things for the long haul.

Tariq · 1 month ago

I think that it's great that you brought up Warren Buffett... after all he's often quoted as saying "Our favorite holding time is forever."

My guess is that a lot of investors are unable to practice slow capital because of the constraints they operate under with constraints like investor redemptions and the temperament of their partners. A few guys have managed to kind of circumvent that either by getting good partners but ultimately it is tough. Typically I think you see standards for partners deteriorate as more money is thrown at the investor to manage... Funds end up chasing the capital they manage instead of chasing the right investments.

fredwilson · 1 month ago

I totally agree with that. Money has a way of corrupting a great investment style

allenburt · 1 month ago

Great insight, Fred. I believe we will see a stronger movement towards slow capital as we emerge from the current financial system mess. Keeping an emphasis on long term growth, not speculative quick flip.

Ryan Graves · 1 month ago

I think the turtle from "The Tortoise and the Hare", would agree.

druce · 1 month ago

Counterthesis: when markets and technology move fast, capital has to move fast. One man's 'short-term incentives' is another's 'market discipline' - conversely slow can mean risk-averse, entrenched management that doesn't adapt.

Synthesis - based on the situation and your own abilities, sometimes when everyone else moves fast, best strategy is to move slow - other times, when everyone moves fast, best strategy is to try to move even faster.

Abortions for some, miniature American flags for others! (Simpsons Treehouse of Horror VII)

Dorothy Jean · 1 month ago

Sounds like Acumen Fund's approach to investing -- they call it patient capital. For the uninformed -- Acumen Fund (www.acumenfund.org) is a philanthropic venture capital fund that invests in social enterprise. Your take on slow capital is so true for emerging technology... and Acumen's thinking is that when going for the triple bottom line, patience is particularly important.

Charlie Crystle · 1 month ago

tblcapital.com, SJF, Calvert...

Gerald Buckley · 1 month ago

Not so sure "Get Big Slow" would play out well on Sand Hill :) NASCAR will certainly object (safe money on them digging in). But, I think the airlines have it perfected. Not sure I like this "slow" thing of which you speak. Slow sex? C'mon... seriously?!

Aristotle · 1 month ago

Fred, this is one of my favorite blog posts of yours. Slow capital is like a deep breath reminding you of where you are and to be present in each moment. You reminded me of one of my all time favorite Warren Buffet quotes:

"The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard. If the world couldn’t see your results, would you rather be thought of as the world’s greatest investor but in reality have the world’s worst record? Or be thought of as the world’s worst investor when you were actually the best?"

In my experience people with an inner scorecard tend to already practice "slow" living because they find value and meaning in the act of doing things in and of themselves. People with an external scorecard come across inauthentic and seem rushed and frantic because they find value and meaning in what other people think about them. Unfortunately most people (especially those in business, and most especially those in our industry) have an external scorecard.

As an entrepreneur, I try to avoid investors that don't practice slow capital, but this is nearly impossible. With abundant short term thinking, and extremely long reward schedules, deriving a sense of value from external validation has reached epidemic proportions in the venture capital business. Of course there are exceptions, such as you Fred and a few others, who don't invest to flip, and don't view their investments and the people they invest in as a means to an end.

And entrepreneurs who practice slow entrepreneurship gravitate towards that. It's no coincidence that USV has invested in companies such as Zynga, Twitter, Boxee, and Foursquare when so many other so-called competitive seed stage firms have either passed on or been passed on by all of these companies.

JLM · 1 month ago

I love your description of an "inner scorecard" because after all we are all our own worst critics. And rightfully so. An inner scorecard is what YOU really think which like character is how we act when nobody is watching. A great thought.

fredwilson · 1 month ago

The concept of an internal scorecard is great. I'm gonna think about that

SlowMoney · 1 month ago

Take a look at Slow Money. www.slowmoneyalliance.org Woody Tasch founded it and wrote the book with the same title. He will be speaking at NYU Reynolds center on Nov. 5th at 5.30 PM.

Charlie Crystle · 1 month ago

woody's a great guy, and previously headed investor's circle (http://investorscircle.net)

fredwilson · 1 month ago

Hmm. I'd like to go to that.

Don Greenfield · 1 month ago

There is an organization called the Slow Money Alliance which is a grass roots organization founded to promote investment in companies that focus on sustainablity and local food production. The group recently launced a one day campaign to raise one million to act as seed investment money. Its vision is to act as a catalyst to an emerging network of investors, donors, farmers, and activists committed to building local food economies. The principle of this organization embrace those as expressed in your post.
. The founder is Woody Tasch, Chairman and President. Their website is www.slowmoneyalliance.org.

fredwilson · 1 month ago

I'd like slow money to think bigger. This movement needs to spread all the way to goldman sachs and citibank

Mark Geller · 1 month ago

Another great post from Fred Wilson on Slow Capital and the reason he and Union Square Ventures are at the top of their game.

Slow Investing · 1 month ago

Something tells me a slow investor would have waited a bit before throwing money at hyped-up flops like outside.in and foursquare.

Charlie Crystle · 1 month ago

slow investing isn't about the speed at which one invests. It's about the mindset in dealing with your investments, about not rushing for the IRR or ROI, but truly building longterm value, which sometimes makes exit a secondary concern.

Nice troll, btw.

fredwilson · 1 month ago

Or work slowly but surely to make them successful

Mike O'Horo · 1 month ago

I guess Eric Clapton was onto something with that Slowhand stuff.

fredwilson · 1 month ago

Nice!!!

Healy_Jones · 1 month ago

I love the concept, and I think that many other VCs strive to have a similar style to investing. However - I think the accountants of the world are against you. These silly annual valuations for venture funds defeat the purpose of slow investing. "What is it worth now? How about now? How about now?" This just doesn't add any value to the investors or the fund, and somewhat forces VCs to think like short-term investors. The truth is no one knows what an early stage startup is worth until someone decides to buy it or another qualified investor comes along and makes an investment. Slow capital introduces a lot of unknowns, since the result of an investment, or the entire fund's investment, won't be known for a long time. Real value in a venture investment is generated over several years, not at arbitrary fiscal year ends. Accountants need to chill out. (Sorry for the rant, I was once a junior VC at a fund and had to help with these valuation exercises. Painful and pointless.)

fredwilson · 1 month ago

Don't get me started. Andrew and I do these in our firm and its a surreal experience for both of us

iamronen · 1 month ago

Emil Sotirov · 1 month ago

Two questions:

1. Guess how fast did Craigslist grow to become as big as it is now (annual growth rate)? (answer quickly, don't cheat by trying to calculate it).

2. Would you (if investor) invest in a web company with projected growth rates similar to that of Craigslist?

fredwilson · 1 month ago

I wish every day that we had invested in craigslist. It is iconic in our firm and represents an ideal that we aim for in all of our investments

davidkpark · 1 month ago

I completely agree and disagree at the same time. I completely agree with your description of USV (seems obvious since you an integral part of the firm, but it's also what I hear from others). I completely disagree with the term "slow." USV practices a style called "nurturing" capital, not "slow" capital. While nuturing maybe slow, slow is not necessarily nurturing.

fredwilson · 1 month ago

in the comment thread I detect a dislike of the term slow

Not sure what to make of that

JeremiahKane · 1 month ago

Perhaps the "speed" of the capital should be inversely proportionate to the "speed" of the company.

Agile startups require patient capital - while large entrenched firms, both can tolerate and need "fast" capital as a discipliner of management.

Buffet is the exception that proves the rule since he is more than just capital, often owning the companies and staying active in their culture and strategy.

Overall I think the *Slow* movement is a luxury of affluence (not a bad thing) but not applicable to the developing world.

fredwilson · 1 month ago

Hmm. Interesting last point

Vaibhav Domkundwar · 1 month ago

Slow capital supporting slow startup could really be immensely valuable for a number of reasons. Without the extreme pressure for revenue, startups will make better decisions and entrepreneurs will also not burn out and loose all their work-life balance to realize 4 years later that it was not worth it. I am just not sure if all VCs have the liberty to do that with the pressure to ensure returns for their own investors. But it has to start somewhere and its awesome that USV adopts this philosophy.

Vaibhav Domkundwar · 1 month ago

Its also important to be ready to "practice slow" wherever you are and with whatever you are doing and it would inevitably involve compromises. A lot of startups that take the slow route can be called "lifestyle businesses" which is simply a wrong way to look at their approach. 37Signals can be defined as a "slow startup" that is making a lot of money and am sure has people who are a lot happier than other startups who are running as fast as they can.

Dave Morgan · 1 month ago

As Curt Viebranz and Matt Arkin used to say at TACODA: "go slower to go faster" - I am a big believer. TACODA didn't pick up speed until we "fired" all of our small customers, recognizing that they ate up a lot of our bandwidth but didn't contribute much to our total business. We slowed down, since we lost 30% of our top-line business, and then we speeded up, since that 30% was eating up 70% of our resources. It was (and is) a critical lesson for me.

fredwilson · 1 month ago

You can count on curt for wisdom like that

slowblogger · 1 month ago

I am a slowblogger. I tend to know about a news later, and tend to make my opinion about it much later after the stormy initial debates have gone, when the topic has been outdated. Even at AVC.com, I find myself leaving comments days after.

But why do fast blogging/twitting dominate?

One reason is that the world is becoming more complex and moving faster, and the average shelf life of information has to become shorter. There are more and more new information, and a piece of information gets outdated after even newer information arrives. This is natural.

So, this explains all why we don't see much slow information (generation, distribution, discussion)? Probably not. There are topics that deserve longer thinking and discussing. I think the other reason must be that we made it easier and cooler for fast information.

Blogging has made information faster. With Twitter, even blogging looks slow now. Average shelf life probably being 1-2 hours vs. 1-2 days. All the marketing and journalism encourage you to join the wave. So we get rapid progress in the fast side of the information, which is good. But the other side, the slow, is left undeveloped. The fast information is likely be more popular as the world, which is the ultimate source of information, speeds up, but not this much.

The ebook is showing some hope, but it has not fully utilized the advantage of the Internet. It is just substituting the tree paper with the electrononic paper, an old model using new technology. I am not saying old models are bad, but there must be other new possibilities.

More than any other areas, we need innovation for slow information.

fredwilson · 1 month ago

I find myself getting to topics a day or two after they've left techmeme. Its ok. We can still have a discussion about them here

slowblogger · 1 month ago

I think your openness to slow commenting, as well as the topics you bring, is a key reason why yours is my favorite blog when it comes to commenting. I feel more comfortable here to be a slow (and perhaps too serious) commenter. Thank you for that.

Still, a blog cannot maintain a topic that needs years of discussion effectively. It is built to treat today's news (e.g. Google's profit announcement) and a deep topic that need much longer discussions (e.g. the future of books, fair use of intellectual property, etc.). Great tools have been made for faster information and communication. I think there is a less visible but strong need for tools for the slow.

Guido · 1 month ago

Slow has never been different. It only comes into our consciousness as we have to cope with speed. At the ned of the day, we could approach that slow movement philosophically. In order to get this right with the slow movement we need to change education.

Guido · 1 month ago

p.s. and getting back our values...living values.

mallorca · 1 month ago

We need to get back into the right set of values, living values. Slow has never been different. It only comes into our consciousness as we have to cope with the speed of information. In order to approach the slow movement we need to change education.

alainaugsburger · 1 month ago

I can't help to wonder, what growth and innovations would be generated if the money invested in derivative would be invested in "Slow capital" fueling the "real" economy.

mikemcgrath · 1 month ago

Very insightful and rarely understood. My friends don't understand me curing a ham for 6 months and then burying it in wood ash for 2 years any more than taking over a year to develop my business.

ivospigel · 1 month ago

For a wonderfully readable overview of the slow movement, consider reading Carl Honore's "In Praise of Slow" http://www.carlhonore.com/?page_id=6

fredwilson · 1 month ago

I'll do that
Thanks for the suggestion

Keenan · 1 month ago

Thanks for the inspiration, I will be doing a "slow sales" post. Sales needs it. The pursuit for revenue NOW is undermining relationships, sales environments, long-term growth and some cases pushing the integrity line.

Mike O'Horo · 1 month ago

In many of these threads I'm an outsider, being much longer in the tooth than many here and neither a social media entrepreneur nor investor. I follow this stuff from a try-not-to-be-completely-ignorant-about-the-future standpoint and because, having recently fired myself from a company I founded 18 years ago, I'm sniffing around to see what might be interesting enough to do for another 15 or so years.

Most of us are one-trick ponies, at least when it comes to true expertise. My one trick is sales, more specifically facilitating and managing the buy/sell decision. It's not a bad trick to have; eventually, all business conversations involving revenue, ROI, etc. must include sales.

IMO, "slow sales" takes two forms. One is slowed by the buyer, the other by the seller. The latter is far more beneficial to both.

Unfortunately, somewhere along the line the word "sales" took on a negative cast, perhaps justifiably, reflecting behaviors directed toward engineering a predetermined outcome (the buyer saying "yes") that the seller cannot know beforehand is, in fact, good for the buyer. Even if choosing your solution somehow has been a great decision for 100% of buyers who have said "yes" to date (a non-existent condition in the real world), you still don't know whether or not it will be a great decision for this next prospect.

Looking at it from the prospect's perspective, he knows that buying from you is good for you; he doesn't yet know whether it's good for him, no matter how many other buyers it's been good for previously. If a seller tries to get me to take an action that's good for him, but is not yet clearly good for me, I must slow the process, i.e., fend him off and delay a decision, until my self-interest relative to the action urged is clearer. This is buyer-slowed sales. Most times, it precludes trust and yields an antagonistic relationship.

Wise sellers who value their reputation and integrity look at sales through a different lens. They see a sale as a decision to be mutually investigated and facilitated. They recognize that an honest, objective investigation of the decision environment and buyer/seller self-interest will yield one of two clear outcomes: 1) It's a great idea for us to do business together; 2) It's not a good idea for us to do business together. In case #1, we'll both want to move forward together. So much for the silly idea of "closing." In case #2, the seller will often recognize this regrettable truth first. If he urges doing business anyway, he proves conclusively that he has no integrity. If he acknowledges the discovered truth, he shakes hands with this prospect and steps away, he strengthens trust for the next encounter and raises the likelihood that this prospect will refer others to him based on his integrity and the legitimacy of his decision-management process.

Salespeople who have, and rigorously apply with integrity, a reliable decision process insert into the sales dynamic a hugely valuable decision ingredient that's usually missing. Buyers know it when they see it.

In the sense that they're not injecting the too-typical artificial urgency that taints the word "sales," such a salesperson could be said to be practicing "slow" sales. "Hold on. I don't know if this is a good idea or a bad idea, if you should buy from me or not. Let's find out, together."

Trust is the currency of the realm, and the only thing that preserves one's welcome at the decision table.

For 14 years, we published a weekly sales/marketing tip called ResultsMail. Its purpose was to provide practical advice for the senior lawyers we trained to sell to Corporate America, and to remind them that their coaches were on standby with just-in-time coaching. (Interestingly, three years into it, Seth Godin published "Permission Marketing" and gave us a label for what we'd been doing.)

We're no longer proactively in the lawyer coaching business, but we've kept the searchable ResultsMail archive active at http://salesresults.com/rmarchive-disp.cfm. I hope you find it helpful.

Keenan · 1 month ago

Mike,

Well said. The latter is far better. It's about providing value, and
value can't be rushed.

I wrote a "Slow Sales" post I think you will enjoy: http://asalesguy.com/2009/11/01/the-pace-of-sales/

nivi · 1 month ago

"There is more to life than increasing its speed." – Gandhi

fredwilson · 1 month ago

Nice one Nivi!

David Hamilton · 1 month ago

Anyone who has read James Gleick's Book 'Faster: The Acceleration of Just About Everything' will appreciate what a faster society can lose us.

The best example he gives is the Cinema Audience research, where the viewers twist dials to indicate whether they like a particular scene. However, most of us don't judge a film on individual scenes, and often do not really know if we liked a film until the next day. Thus the instant feedback captures a phantom reaction - one that hasn't actually properly formed in the viewer yet.

Similarly, traded markets allow people to invest and divest so fast that they require no real understanding of the stock that they are buying (or, in the case of shorting, selling!). Hence the fundamental concept of buying shares as a way of capitalising a business among interested investors is effectively dead for publicly quoted stock.

It would be fascinating to see how a rule to force investors to hold publicly traded shares for at least 3 months would change the markets (and indeed the whole attitude to shareholding). Some of the results might be:

* Day-trading and other short-term speculation would be forced out of stocks into the derivative markets

* Mispricing of publicly quoted companies would occur much less often, as the markets would exhibit lower volatility.

* Investors would be forced to take at least a passing interest in a company's middle-to-long-term strategy

* Companies would be encouraged to have a middle-to-long-term strategy! (As opposed to so many execs merely having an 'exit plan')

* Trading exchanges would hate the loss of liquidity (and profits). However, the exchanges are purely an market enabling mechanism - why should we let the tail wag the dog?